Indian Markets may open positive in line with global cues

Morning Update 24thOct 2011

Opening Bias

The markets may open positive in line with global cues. The SGX Nifty is trading up by 32 points at 5100 indicating a gap up opening.

U.S. stocks surged on Friday, on the back of optimistic expectationsfrom the European Union summit on Sunday and as McDonald’s Corp profit triggered buying momentum that built into the close.

On the European Union Summit front, German Chancellor Angela Merkel and French President Nicolas Sarkozy presented a united stand, assuring investors that European leaders remained on track for an agreement on solutions to the euro zone's long-running debt crisis, but provided little evidence of a breakthrough. Sarkozy held out hope for agreement on recapitalizing banks, addressing Greece's worsening financial situation and moves to leverage the European Financial Stability Facility to provide more firepower in the effort to contain the crisis. Merkel said discussions on leveraging the EFSF centered on two options but don't involve utilizing the European Central Bank.

As a result, Asian stocks have climbed this morning after European leaders said they were making good progress on a plan to resolve the debt crisis that has been roiling global markets.

Corporate News

The proposal to allow foreign airlines to pick up stakes in domestic carriers may become a reality soon as the Department of Industrial Policy and Promotion (DIPP) under the commerce ministry has floated a draft cabinet note for inter-ministerial discussions on foreign direct investment (FDI) in aviation. It has received the civil aviation ministry’s nod to go ahead with the proposal. DIPP has argued foreign airlines may be allowed to pick up 26 per cent stake. According to the present norms, 49 per cent FDI is allowed in airport infrastructure-related projects but there are restrictions on foreign investment in domestic airlines. If the proposal goes through, domestic carriers like Jet Airways, Indigo, Spice-jet and Kingfisher Airlines would get a fresh lease of life.

Leisure hospitality firm Sterling Holiday Resorts is renovating its 17 existing resorts for Rs 150 crores and plans to add five more properties over the next six months. With close to 57,000 members, Sterling Holidays is also exploring overseas destinations and are looking at opportunities in Dubai, Malaysia, Sri Lanka and Thailand, which might be on lease basis or leased on limited inventory basis.

Leading plastics products maker Supreme Industries has drawn up plans to invest Rs 200 crore in the current fiscal year. As per the plan the company will invest Rs 58 crore to set up a unit for producing LPG composite gas cylinders at Halol in Gujarat, and Rs 56 crore to start a new unit to manufacture cross laminated plastic products in Vadodara. Besides, it is also investing Rs 28 crore in a new unit at Hosur, Tamil Nadu to manufacture protective packaging products and further plans to invest in expansion of other value -added products. The capex will be funded through internal accruals, and part of it will come from selling its space in Commercial Corporate Park in Mumbai for about Rs 70 crore.

Courtesy the Oil Ministry, Oil and Natural Gas Corp (ONGC) will get a windfall of over Rs 1,300 crore from the domestically produced natural gas, which is priced in dollar with the rupee touching a 30-month low against the US dollar. This is possible because the ministry changed the pricing of domestically produced natural gas from rupee to the US dollar last year, benefiting the upstream companies.

Arshiya International Ltd, an integrated supply chain and logistics infrastructure solutions company, has inked a pact with Soilmec India, a subsidiary of Italian based leader in design, manufacture, and distribution of equipment for the ground engineering industry, for making Arshiyas first Free Trade and Warehousing Zone (FTWZ) in Panvel, near Mumbai as its regional distribution hub. With this deal, Soilmec will be utilising Arshiyas Mumbai FTWZ for importing large sized machines such as large diameter piles, cranes, hydromill, grabs and microdrilling equipment as well as the spare parts required to service these heavy engineering machines.

Gateway Rail Freight, a subsidiary of Gateway Distriparks Ltd and Indias largest private container train operator, commenced double-stack container train operations from its Garhi Harsaru rail terminal. According to the company, the commencement of double-stack container train operations will increase capacity on the NCR - Gujarat ports route and improve the capability of rail operations. With increasing frequency of double-stack trains, rail transportation will become more economical and this will benefit their customers.

JSW steel in its Q2 FY12 result reported net sales of Rs 7625.06 crore up by 33 per cent. The growth was mainly on back of higher sale volume and improved sales realization. However the net profit of the company fell by 75 percent because of iron ore shortage and higher forex translation losses of Rs 512 crore due to adverse movement of the Rupee against dollar. The company is now in talks with its long-term customers to raise its steel prices by 3-4 per cent.

IPO Listing

Vaswani Industries IPO

Listing Date: Monday, October 24th, 2011
BSE Scrip Code: 533576
NSE Symbol: VASWANI
Listing In: 'B' Group of Securities
ISIN: INE590L01019
Issue Price: Rs. 49.00 per Equity Share
Face Value: Rs. 10.00 per Equity Share

Corporate Action